Stabilizing an Unstable Economy

Authors: Hyman Minsky

Key Ideas

1. Financial instability is inherent in capitalist economies. Minsky argues that financial instability is a natural part of capitalist economies due to the inherent nature of financial markets and institutions.

2. Economic booms breed financial fragility. Minsky suggests that during periods of economic expansion and prosperity, market participants become complacent and take on more risk, leading to the buildup of financial fragility.

3. Financial crises are characterized by a sudden loss of confidence. Minsky identifies the loss of confidence as a key factor in triggering financial crises. W....
.....

To access all key ideas and much more, get Premium.

Quiz

1. What does Minsky argue about financial instability in capitalist economies?

It is an inevitable part of capitalist economies.

It is caused by external shocks.

It can be eliminated through monetary policy.

It is unrelated to the behavior of market participants.

2. According to Minsky, what happens during economic booms?

Financial stability is strengthened.

Market participants become complacent and take on more risk.

There is a decrease in financial fragility.

There is a decrease in the buildup of debt.

To access all questions from the quiz, get Premium.

Preview Book